Class Action Brought Over Robodebt

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It may well turn out to be the lawsuit of the year: A class action brought against the Federal Government over Centrelink robodebt.

The class action, which will be launched in the High Court of Australia, was announced today by Opposition Leader Bill Shorten and argues that the automated debt system is unlawful. It seeks both the repayment of falsely claimed debts and compensation for people who have been affected.

Lawyers will argue that the collection of money based solely on a computer algorithm is unlawful. They also allege that up to 160,000 errors, amounting to millions of dollars, could be blamed on robodebt.

What is robodebt?

Robodebt’s official name is Online Compliance Intervention. It is an automated debt recovery system that the Federal Government introduced into the Department of Human Services in 2016.

The system gathers data from other government agencies like the Australian Tax Office and then compares it with data that people have reported to Centrelink, and checks whether the income you reported to Centrelink (which is the mount used to calculate your benefit) is the same as reported to the tax office by your employer. Centrelink has used data matching for many years, and in fact, as it has been pointed out several times in media that the particular algorithm used by the system is exactly the same as the one used by the previous Labor Government, when it was in office.

The significant change implemented by the Turnbull current Government is what happens after the computer detects a discrepancy, and this is where most people’s distress has arisen from.

In the past, a Centrelink officer (a human) would do a basic investigation before deciding to send out a letter. But since 2016, the computer has been printing and sending letters on its own. Before automation, only about 20,000 interventions were made each year. Figures released in the Senate show that since its inception robodebt has raised about 500,000.

The Government maintains that initial letters are requests for more information, but many people claim they never received these letters (perhaps they were sent to old addresses or old email accounts) and therefore did not know to log onto the MyGov website or contact Centrelink to discuss the alleged discrepancies. Instead, these people heard about the problem with their benefits – some resulting from benefits received years earlier – via a phone call from a debt collection agency, contracted by the Government. Effectively, for these people, their inaction was a presumption of overpayment, and a debt was raised.

Is the ‘robodebt’ legal?

Many legal experts have long argued that for any organisation to behave in such a manner is illegal. Others such as Terry Carney who served as a member of the Administrative Appeals Tribunal’s social security division for 39 years until his term ended in September 2017, say it is also completely illegal for the Government to operate in such a manner.

Because the robodebt program averages income over fortnightly periods rather than discovering welfare recipients’ actual income for each period, it is often inaccurate. What’s more says Terry Carney, is that social security legislation clearly outlines that the onus to prove a debt lies with Centrelink, and not on the beneficiary of a welfare payment.

The system is already the subject of two legal challenges by Victoria Legal Aid in the Federal Court.

Recently the Government made a number of changes to improve the system including sending out letters via registered post to ensure they make their way to recipients. Another significant change is that people who have cases under review don’t have to start paying their debt until the case is resolved. However, the changes are not retrospective and thousands of Australians have been affected by errors in the system as well as administrative malfunction and found themselves on the receiving end of aggressive debt-recovery processes for debts they didn’t even realise existed.

Incredible stress and duress

What’s more, they’ve had to endure the stress of proving their case. It was recently reported that more than 2000 people died after receiving a robodebt notice between July 2016 to October 2018.

Another Senate Inquiry into the system is currently underway with submissions due by the 20th of this month.

Bill Shorten, also the Shadow Minister for Government Services, has called on the Government to suspend the scheme while legal action is underway.

Mr Shorten says the class action is vital to test the legality of the system and to ensure that victims have their day in court, and are heard. He has also accused the Federal Government of a ‘cover up’ even though it is aware of the system’s failings and of wanting the revenue ‘at any cost.

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Sonia Hickey

Sonia Hickey is a freelance writer, magazine journalist, and owner of 'Woman with Words'. She has a strong interest in social justice and is a member of the Sydney Criminal Lawyers® content team. Sonia is the winner of the Mondaq Thought Leadership Awards, Spring 2022.

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